New Tax Law Benefits Corporations and Wealthy While Putting Health Care and Public Services at Risk According To New Report

CONCORD, NH – Local advocates and constituents held a press conference in Concord to discuss how the new tax law in effect this year will impact New Hampshire families and services they depend on. The new Tax Cuts and Jobs Act became law after passing the House and Senate late last year despite widespread constituent opposition and record-low public approval ratings. New Hampshire’s Congressional delegation voted against the bill, but Governor Chris Sununu praised it as a “net positive.”

Read the report: New Tax Law Benefits Corporations and Wealthy While Putting Health Care and Public Services at Risk (April 2018)

The new law provides about $1.5 trillion in tax breaks to individuals and corporations with about two-thirds going to the richest 20% of households this year and nearly 83% of tax benefits going to the richest 1% by 2027 when the law is fully implemented. The law also permanently cuts the national corporate tax rate while paying for some of the tax cuts with changes to the Affordable Care Act (ACA), increasing the number of uninsured people and driving up premiums for consumers in New Hampshire by as much as $1,900 annually.

The rest of the tax breaks in the law are not yet paid for adding $1.9 trillion to the deficit and forcing additional cuts in the ACA, Medicaid, Medicare, education, and public safety net programs currently proposed by Republican lawmakers.

Advocates at the event released a new report from Americans for Tax Fairness and Health Care for America Now  that shows the specific impact of the tax cut package for families in New Hampshire and compares that impact with tax benefits that wealthy corporations, especially health insurance companies and prescription drug manufacturers, receive under the same law. According the report’s findings:

  • The richest 1% of New Hampshire taxpayers—people with an average income of at least $1,720,400 will receive 23% of the state’s total tax cut.
  • The bottom 60% of taxpayers—people with income less than $83,420—will get just 15% of the tax cuts.
  • The average tax cut for the richest 1% is $57,320 while the average tax benefit for the lower 60% of New Hampshire people is $630—under two dollars a day.

“Despite a PR campaign meant to convince the public that businesses are passing along their tax-cuts to employees, the reality is that most of the tax cuts are going where many economists had predicted – into the pockets of rich CEOs and other wealthy shareholders,” said Zandra Rice Hawkins, executive director of Granite State Progress Education Fund. “Most health industry companies including the largest pharmaceutical companies like Merck and Pfizer will get massive tax breaks, but will not pass these on to their employees in the form of wage increases or bonuses. The same is true for insurers like UnitedHealth, which will receive $1.7 billion in annual tax breaks but likely not pass these benefits on to customers in the form of lower costs.”

NH_ACATaxCutsAt the same time, Republicans have cut the ACA—a law they want to get rid of anyway—to pay for a large portion of the tax cuts which means that that cost really gets shifted to consumers and states in the form of higher premiums and rising numbers of uninsured people that put a burden on state resources.

The analysis also shows the impact of additional proposed cuts to public programs like Medicaid, Medicare, Social Security Disability Insurance, SNAP and education that President Trump proposed earlier this year to address the $1.9 trillion that CBO (Congressional Budget Office) predicts the tax law will add to the deficit.  Trump’s budget proposal will impact thousands of families in New Hampshire:

  • 112,000 Granite Staters could lose health coverage because of the proposed full repeal of the Affordable Care Act. Women, people over 50 and people with pre-existing conditions would lose important protections that stop insurance companies from charging them more. Seniors could also face higher costs for prescription drugs because of a key provision in the ACA that gives seniors in Part D a discount on prescription medicines.
  • 13,489 people in New Hampshire could lose food assistance through SNAP.
  • 54,177 could lose services because of cuts to SSDI and SSI.
  • New Hampshire would lose $417,681,383 from highway funding and $71,927,591 from transit funding between 2021 and 2027 resulting also in significant job loss.
  • 79,562 New Hampshire college students could lose federal student aid, 8,257 kids could lose after-school programs and 170 teachers could lose jobs because of proposed education cuts

Speakers at the event raised these concerns and called on Governor Chris Sununu to demand repeal of the new tax law in order to protect these health care, education and public services from more cuts.

Zandra Rice Hawkins, Executive Director, Granite State Progress Education Fund: “When the new tax law is fully phased in, 83% of the tax cuts will go to the wealthiest 1%. New Hampshire working families will lose out twice, because Trump’s tax cuts for the wealthy also take revenue out of the federal budget that could be used for public services and investments. These tax cuts explode the national debt and thereby endanger future funding for Medicare, Medicaid, Social Security, and other public services working families rely on. New Hampshire families need to take a long, hard look at the law and how it will impact them now and in the future. We call on Governor Sununu – who praised the tax bill as a “net positive” – to demand repeal of the new tax law in order to protect health care, education, and public services from more cuts.”

Senator Dan Feltes (D-Concord): “To pay for tax cuts that mostly benefit big corporations, President Trump and the GOP Congress have targeted vital public programs, particularly health care, for service reductions. It’s time that we stop putting the interests of the wealthy and corporations over those of working families and local communities. I introduced state legislation to close tax loopholes that disproportionately benefit the wealthiest one percent at the expense of middle class Granite Staters and small businesses, and also to provide for a Working Families Property Tax Credit helping Granite State workers with child care or caretaking responsibility afford to stay in their homes. Unfortunately, both proposals have been rejected by the Republican majority. Instead, the Republican majority put through a budget that gives even more tax breaks for big corporations, many with headquarters out-of-state.  Amazon, for example, got a big tax break in Gov. Sununu’s budget, and we didn’t get anything in return. We need to invest in our communities. We need to lift up working families and small businesses struggling to get by. We need to make big, out-of-state corporations pay their fair share so we can afford to strengthen our communities through long-term improvements in roads and bridges, schools, affordable and workforce housing, and combatting our public health epidemics. We can do this if we have the political will to make the best decisions for our communities and our families. The Trump-Sununu corporate tax breaks don’t do that, and they should be repealed before they do more harm.”

Lisa Beaudoin, Executive Director of ABLE New Hampshire: “In December, I traveled with other Granite Staters to Washington DC to protest this reverse Robin Hood tax bill. This tax law harms people with disabilities and will quietly result in deep cuts to a whole range of programs that are critical to people with disabilities. We’re already starting to see this. In his proposed budget for next year, President Trump wants deep spending cuts to services that working families across the country rely on, including cuts to Medicaid and other health care programs, food stamps, and disability programs. In New Hampshire, 32% of the state’s general revenues come from the federal government according to Governing magazine. That means whenever the federal government cuts its budget, as Trump wants to do, either New Hampshire must make up the difference with local tax revenue, or New Hampshire residents lose important services. This tax bill is a slow death sentence to people with developmental disabilities because they will be paying dearly for the tax cuts.  People with disabilities will die because of a tax bill for the wealthy.”

Eddie Gomez, Advocate: My sister is a hardworking, single mother.  My nephew is affected by the genetic disorder muscular dystrophy.  His life expectancy is 30 years old.  I went to DC to be his voice and the voice of so millions of others that are struggling who don’t have time or financial means to go to DC to confront these assaults that Republicans in Congress have hoisted on them. One of the things I was most concerned about was the medical deduction threshold. I already worry about how my sister will be able to get services for my nephew on a minimum wage, middle-class income, but some versions of the tax bill even called for eliminating the medical expense deduction – a deduction used by 8.8 million families in 2015 when their expenses exceeded 10% of their income. We’re talking about things like wheelchairs and ADA showers, but it also applies to out of pocket medical costs for long-term supports and services, like Direct Support Professionals and personal care attendants.   So I was excited to learn that under the new law, the threshold was lowered from 10 percent to 7.5 percent. But then I learned that the lower percentage will only be in place for the 2017 and 2018 tax years, while the tax cuts for wealthy corporations have no expiration date. I went to DC to protect my sister from poverty and my nephew from being institutionalized as an adult. I am calling on Congress and all elected officials to spend more energy helping middle class families like mine than wealthy corporations.”

Media outlets are encouraged to use footage from the press conference in their tax day coverage, located at https://youtu.be/9AF3Jljmm7o. High resolution photos are available by request.

###